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The Food Marketing Institute (FMI), National Retail Federation (NRF), and Retail Industry Leaders Association RILA), buttressed by a study done by AT Kearney, have come out against the possibility, raised by the Trump administration, that the US could withdraw from the North American Free Trade Agreement (NAFTA).

Such a withdrawal, the study says, “would cost retailers and consumers up to $16 billion a year and lead to the loss of 128,000 retail-related jobs over the next three years … The study finds that withdrawing from NAFTA would subject retail imports to $5.3 billion in annual tariffs that would that would most likely be passed along to consumers in the form of higher prices.

“Food and beverages sold at grocery stores would see the biggest hit at $2.7 billion, followed by apparel and footwear at $501 million, electronics and appliances at $390 million, household goods at $498 million and auto parts at $240 million. The remainder would come from the “flow-through” costs of tariffs imposed on other industries that would drive up retailers’ costs for services such as transportation.”

“This report helps illustrate how – thanks in part to our expanded trade with Mexico and Canada – U.S. grocery shoppers can wander the produce section in January and take home groceries to allow them to eat like it’s a June day,” says FMI president/CEO Leslie G. Sarasin. “Customers are accustomed to this type of access to fresh products and increasingly demand it in their efforts to make healthy choices.”

And RILA’s president, Sandra Kennedy, adds: “This report confirms that leaving NAFTA puts American jobs, family budgets and the entire North American economy at risk. We encourage the administration to modernize and preserve NAFTA to support the millions of American jobs along the supply chain that rely upon free and fair trade.”

CNBC is reporting that NAFTA negotiations are in a make-or-break period, “as ministers from Canada, the United States, and Mexico seek to resolve an impasse in key areas before elections in Mexico and the United States complicate the process.”
KC's View:
I agree with the three retailing groups, but I wouldn’t bet any serious money that we’re going to stay in NAFTA. It just doesn’t seem likely, though maybe I’ll be surprised.